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from Plymouth, Michigan

replied over 4 years ago

Terry,

Doesn't matter. We assign/wholesale HUD properties all the time. Just make the offer in an LLC, then if accepted, sell the LLC. The only sale of the house is when the new LLC owner executes the agreed purchase agreement.

Broker/Flipper from Austin, Texas

Involved In Real Estate from Houston, Texas

replied over 4 years ago

HUD homes are first available for a good amount of time ONLY for Owner Occupants. Eventually when the Gov realizes that a Home Occupant Owner would never possibly buy that turd in its current condition, they open it to Investor/ Cash Offers.

You can buy it at that point, and there is no seasoning. Basically saying the same thing as these guys above.

I have purchased over 20+ HUD homes in Houston, TX previously, and can say that in 2014 they have been overpriced and is slim pickings for Investors looking for deals. Good Luck!

Investor from Magnolia, Texas

replied over 4 years ago

Wow! How impressive! This is my first post on BiggerPockets, and I am thoroughly impressed with the quality and quantity of your responses, guys and gals! Thank all of your very much! I will attempt to correct my Realtor friend, but that may be in the too-tough category, yes?

Investor from Magnolia, Texas

replied over 4 years ago

Thanks, Joe. Yes, I agree about the Realtor matter. I am looking for such a Realtor that is HUD & Investor Friendly. Using the Blitz Wholesaling System by Brad Swanson. Do you know about his program? It is the most comprehensive I have seen, and my partner is in Detroit as we speak, setting up an operation there. I will be doing likewise in other targeted cities, after doing the specialized research Brad's system teaches, to find lots of inventory and investors. Houston's RE market is hotter than hell, and it is difficult to find any props under full retail price and more! So, my research is looking for cities where that is not the case. Better chances of successes there.

from Plymouth, Michigan

replied over 4 years ago

Terry,

I'm pretty busy here. It's a target rich environment for holding real estate. HUD, REO and FMA are all leaking out their foreclosures slowly so they don't saturate the market and lose the momentum of rising value...but you can still get the HUDs cheap.

I have a number of out of state investors I work with because their states are not as good as it is here. I focus on the 'burbs. My out of state buyers are flipping in their high price areas, and buying holds here because they can buy for all cash...something they can't do with just the profits in their areas.

I never heard of the program you're talking about, but there are so many... I'm always interested in exploring new ways to do things though.

from Brighton, Michigan

replied over 4 years ago

Actually, rather than go through the trouble of relying on a realtor to bid for HUD homes on your behalf, I've chosen to obtain my own RE license. I understand that as a licensed realtor, HUD pays me commissions even on the properties I buy under my own LLC. I read that I may be able to obtain HUD keys when I sign up as an approved HUD agent.

Real Estate Investor from Davenport, Florida

Doesn't matter. We assign/wholesale HUD properties all the time. Just make the offer in an LLC, then if accepted, sell the LLC. The only sale of the house is when the new LLC owner executes the agreed purchase agreement.

Joe VilleneuveREcapSystemA2REIC

It must be "State specific"...

In Florida, you can double close with a simple disclosure form. You CANNOT assign a HUD contract. If your name or entity is on the submitted contract, THAT is who HUD will sell to...

Real Estate Investor from Davenport, Florida

Actually, rather than go through the trouble of relying on a realtor to bid for HUD homes on your behalf, I've chosen to obtain my own RE license. I understand that as a licensed realtor, HUD pays me commissions even on the properties I buy under my own LLC. I read that I may be able to obtain HUD keys when I sign up as an approved HUD agent.

You can't just BE a Realtor by getting a license. Your business must be done under the license of a Brokerage. (hanging your license)

The Brokerage needs to be a HUD authorized Brokerage, and you need to sign up, using THEIR credentials. THEN, your Broker can authorize a set of keys for you to use. Be aware that there are a limited number of keys available to the Broker, and it is illegal to copy them.

Residential Real Estate Broker from Greeley, Colorado

Actually, rather than go through the trouble of relying on a realtor to bid for HUD homes on your behalf, I've chosen to obtain my own RE license. I understand that as a licensed realtor, HUD pays me commissions even on the properties I buy under my own LLC. I read that I may be able to obtain HUD keys when I sign up as an approved HUD agent.

There are no longer "HUD keys". They are on lockboxes like other listings.

Residential Real Estate Broker from Greeley, Colorado

Wow! How impressive! This is my first post on BiggerPockets, and I am thoroughly impressed with the quality and quantity of your responses, guys and gals! Thank all of your very much! I will attempt to correct my Realtor friend, but that may be in the too-tough category, yes?

Technically your realtor was correct if you are trying to buy in the owner occupant only period. Only owner occupants can bid on HUDs for the first 15 days on FHA insured homes and the first 5 days on non insured homes. FHA Insured has to do with how many repairs are needed on the house based on an FHA appraisal HUD has done before list. There is definitely priority given to owner occupants. As Gregg hall said there is no preference given once the owner occupant only period is over.

Real Estate Investor from Davenport, Florida

I was told by one Guru that there is no seasoning requirement for investors who buy HUD properties; that you could "double close" and sell it to another wholesaler the same day.

Then, a Realtor told me he and the Investor had to sign a HUD form saying that the house would be owner occupied for 12 months.

Which is it? Thanks.

Terry Schell/Houston, TX

Operative word above is... "investor"... THAT will be the defining rule regarding seasoning.

Take the property in the name of a "single property" LLC... Then in a separate transaction to pass ownership, sell the LLC to a rehabber or landlord and they have most of their work for taxes already done.

Also, to HUD, the ownership of the property doesn't change because the LLC still owns it.

from Plymouth, Michigan

I was told by one Guru that there is no seasoning requirement for investors who buy HUD properties; that you could "double close" and sell it to another wholesaler the same day.

Then, a Realtor told me he and the Investor had to sign a HUD form saying that the house would be owner occupied for 12 months.

Which is it? Thanks.

Terry Schell/Houston, TX

Operative word above is... "investor"... THAT will be the defining rule regarding seasoning.

Take the property in the name of a "single property" LLC... Then in a separate transaction to pass ownership, sell the LLC to a rehabber or landlord and they have most of their work for taxes already done.

Also, to HUD, the ownership of the property doesn't change because the LLC still owns it.

Residential Real Estate Broker from Greeley, Colorado

I was told by one Guru that there is no seasoning requirement for investors who buy HUD properties; that you could "double close" and sell it to another wholesaler the same day.

Then, a Realtor told me he and the Investor had to sign a HUD form saying that the house would be owner occupied for 12 months.

Which is it? Thanks.

Terry Schell/Houston, TX

Operative word above is... "investor"... THAT will be the defining rule regarding seasoning.

Take the property in the name of a "single property" LLC... Then in a separate transaction to pass ownership, sell the LLC to a rehabber or landlord and they have most of their work for taxes already done.

Also, to HUD, the ownership of the property doesn't change because the LLC still owns it.

There is no need to do all that. HUD doesn't have a seasoning requirement for investors.

Real Estate Investor from Davenport, Florida

I was told by one Guru that there is no seasoning requirement for investors who buy HUD properties; that you could "double close" and sell it to another wholesaler the same day.

Then, a Realtor told me he and the Investor had to sign a HUD form saying that the house would be owner occupied for 12 months.

Which is it? Thanks.

Terry Schell/Houston, TX

Operative word above is... "investor"... THAT will be the defining rule regarding seasoning.

Take the property in the name of a "single property" LLC... Then in a separate transaction to pass ownership, sell the LLC to a rehabber or landlord and they have most of their work for taxes already done.

Also, to HUD, the ownership of the property doesn't change because the LLC still owns it.

There is no need to do all that. HUD doesn't have a seasoning requirement for investors.

That's true...

It's just an "exit strategy" used a lot here when selling to rehabbers and landlords.

from Plymouth, Michigan

I was told by one Guru that there is no seasoning requirement for investors who buy HUD properties; that you could "double close" and sell it to another wholesaler the same day.

Then, a Realtor told me he and the Investor had to sign a HUD form saying that the house would be owner occupied for 12 months.

Which is it? Thanks.

Terry Schell/Houston, TX

Operative word above is... "investor"... THAT will be the defining rule regarding seasoning.

Take the property in the name of a "single property" LLC... Then in a separate transaction to pass ownership, sell the LLC to a rehabber or landlord and they have most of their work for taxes already done.

Also, to HUD, the ownership of the property doesn't change because the LLC still owns it.

There is no need to do all that. HUD doesn't have a seasoning requirement for investors.

That's not why this is done. This is done in place of wholesaling/assigning a contract. HUD requires the accepted PA not change...meaning they agreed to sell to the buyers making the offer that was accepted...so, you can't assign the contract.

By making the offer in the name of an LLC, the LLC is the buyer. Sell the LLC and you end up in the same place as assigning the contract...without "assigning the contract". The buyer never changes...it's still the LLC...just under different ownership.

If someone wants a dozen eggs, but the seller of the eggs only wants to sell 12...don't argue with him. LOL.